Fixtures & Fittings (Stamp Duty)

BillyGoatGruff

Just a quick one to see if anyone has had dealings or know the specific rules in relation to paying for fixtures and fitttings as to avoid stamp duty on a house....

e.g ,,, A house cost 330k, stamp duty exemption limits for first time buyer is 317500.

Can the house be sold for 317500 + 12500 for fixtures and fittings and is this legal and if not what is.....

Hope i explained that right..( not the best at explainin stuff ya know)

Cheers

samo

It can BUT revenue could potentially look at the transaction and request a breakdown of what exactly you have purchased with regard to fixtures for 12.5k as the purchase price will show 317k!

Personally for such a high amount its a bit of a chance to take as if revenue thought you were trying to evade the correct stamp duty - you'll be liable for the amount + interest etc. I know plenty of people that have had no problems with 4-5k above the 317k threshold but not as much as 12.5k. Your solicitor may be wary of being party to it as will the vendors solicitor in case it implicates them.

One other thing to condiser is that if you buy the house and decide in the future you want to rent it within 5 years of purchase you'll still be liable for stamp duty at the full rate as you will be classified as an investor rather than a FTB.

samo

Also just realised you might get more answers if this is in the accommodation/property forum as well!!!

BillyGoatGruff

Thanks a million for the reply.... Could moderator please move to accomodation/property forum

Dub13

BillyGoatGruff wrote:

Thanks a million for the reply.... Could moderator please move to accomodation/property forum

Done

Dub13

I did this back in 2000,I bid 153k Irish punts for my house and at the time the stamp duty threshold was 150k.So I came to an agreement with the seller that I would buy the contents for 3k,it was the most expensive box of tea bags I ever bought as thats all that was left in the house.

Idleater

I think you will have to pay the "extra" money (ie over 317500) in cash because you will not be able to hide it in the mortgage.

The bank will not give you a mortgage based on 340000 because the deal would be struck on 317500.

TRS will also be on 317500 and not 340000.

L.

BillyGoatGruff

thanks for replies.. i have 40.000 euro. can i have a contract whereby it states 22,000 as a deposit and 18,000 as a seperate legal contract for the appliances in the house. eg. all kitchen appliances,beds,3 piece furniture,tv.
the house costs 335k. any advice much appreciated

Idleater

BillyGoatGruff wrote:

thanks for replies.. i have 40.000 euro. can i have a contract whereby it states 22,000 as a deposit and 18,000 as a seperate legal contract for the appliances in the house. eg. all kitchen appliances,beds,3 piece furniture,tv.
the house costs 335k. any advice much appreciated

Note this is NOT legal advise - only opinion:


I would think that once you have a "contract" you are in seriously dodgy territory because in the eyes of the Government the entire transaction is worth €335k not 317500. In such an instance, having something on paper will essentially be "concrete" evidence that you are partaking in Tax avoidance.


Problems arise in that you could have to pay tax on appreciated gain because you have not paid "market value" for the property. I think something was introduced to stop parents selling their home to a sibling for much less than the market rate (eg selling a €800k house for €200k).

Of course, these penalties will be on top of the actual taxes that you "should" have paid in the first instance.

I believe your plan will fail when you approach the bank to draw down the mortgage. Mainly because they would be aiding you in Tax avoidance and I think they are kind of in hot water already with such issues.

Have you talked to your solicitors about what you are looking to do?

The stamp duty works out at about €11k or thereabouts???

L.

Dub13

In my experience your solicitor will not want to know anything about this he/she can get into serious trouble if they help you out.

copacetic

Dub13 wrote:

In my experience your solicitor will not want to know anything about this he/she can get into serious trouble if they help you out.

like he says, if you mention any of this to your solicitor he/she will put their fingers in their ears and shout 'i can't hear you'.

i think you are on very dodgy footing, have never heard of anyone going over 10k on something like this and even then you have to be able to prove that the contents are reasonably removable and worth what you paid for them.

basically you can do a seperate deal with the vendor without solicitors involved on contents, but are pretty clearly trying to avoid stamp duty by paying well over the odds for the extras. So if it comes to notice of revenue you will be up **** creek without a paddle...

BillyGoatGruff

thanks for all the replies. i have seeked some advice and i am getting the same advice from them. Its just disapointing trying to buy something half decent. its expensive as it is but paying stamp duty(10k) is dead money.
thanks again. il just have to keep looking for something under 317500

The_Conductor

When I bought my current abode I paid 15k in cash towards the furniture and fittings. Mind you- this did include carpetting, curtains, beds, a table and chairs in the kitchen, a few appliances etc (When I went up into the attic I even found a set of golf clubs up there, of unknown vintage). The Revenue Commissioners may ask for a break down if they feel that a sum towards furniture and fittings is unduly high. They are far more likely to accept higher valuations on a second hand house than on a new one though (not sure why this is?)

Dub13

BillyGoatGruff wrote:

il just have to keep looking for something under 317500

Or something New.